Monday, 22 October 2012

Take a look at my new policy paper published with the Institute for Regional and International Studies (IRIS). The paper reflects on party relations and civic trends in Bosnia and Montenegro
in the time when the two countries held local and general elections,
respectively - in October 2012. Is there a new hope for an emerging true civic participation in rigid, post-conflict societies as Bosnia (esp. the Republika Srpska) and Montenegro, dominated by a single party as of late? The paper is available here.

Friday, 12 October 2012

This week Bulgaria’s
Finance Minister Simeon Djankov pushed through the cabinet an idea to start
taxing by 10% individual deposits in banks. The move is controversial.
Free-market protagonists say this will fuel the grey economy by discouraging
conscientious tax payers from continuing to contribute; and it is not an
appropriate policy for a ‘poor’ country as Bulgaria to try to levy on people’s
savings. Political pundits make sure to remind what Djankov, a former top World
Bank officer, said in 2010 that “taxes would not be raised” in Bulgaria during
his term as this is its comparative advantage within the EU.

I am going to look at it from a public policy perspective. I
am seeing, for the first time in these three and more years of government by
the GERB party, a focused attempt at tackling the ongoing economic crisis. What
have the cabinet been doing so far? Apart from revelling in populist, debasing road-shows,
they stuck to tight budgets and pride themselves on a ‘macroeconomic stability’
which exists since true right-wing people imposed it in 1997. Frugality and
decrease in spending has undoubtedly worked – Bulgaria
looks like an island of serenity in a sea of Greek,
Serbian and Romanian fiscal troubles. But GERB did nothing to actively engage
the crisis. They had no clear-cut policy which to table and face critique by
the observers; and then be implemented, for that matter. On the contrary –
Djankov suspended public payments to private firms in the first year of the
GERB government, only to keep the state records healthier, and maybe kill some
small and medium-sized firms.

Now Djankov is trying to conduct monetary policy via fiscal
tools within the limits imposed on him by the currency board. Monetary policy
is formally impossible in Bulgaria
now. But there are huge amounts of savings accumulating in banks by
conservative, frightened individuals. Deposits rose by 54% in the last two years.
People are scared to spend in this crisis, and prefer to amass for days unknown.
Djankov, decently or not, is trying to engage that money into the economy. He
doesn’t want the tax revenue per se – these stupid 10% on private savings mean
nothing for Bulgaria’s
budget. What he is doing is trying to make the opportunity cost for those crazy
savers too high. He wants to see them spending some money in the real economy,
and not having the banks as mattresses – as they did 15 years ago. He tried to
convince the banks to relax and give loans more easily a couple of months ago.
They did nothing. Banks are more scared than their depositors, and it is just
normal, having Greece in the
south, Frankfurt in the northwest, and Turkey
in the east almost engaging Syria.
Maybe by making the people decide to spend some of this fortune, cemented in
the banks, the Bulgarian GDP could gain on domestic consumption. Just a bit.

A similar move is the recent decision by the GERB-dominated Sofia city council to impose fees on parking in central Sofia. Lots of ‘old’
Sofians protested: “How can you, for god’s sakes, require from us to pay for
parking our cars in front of our own buildings, where we were born, etc.? A fee
of 150 levs (€75) per year for this?! How dare you?” Come on… The whole idea of
this fee is to discourage the presence of automobiles in the city centre. It’s
not the money itself. Look at London and Rome and shut up. I want
to walk and ride bicycle. This rule was another attempt of GERB to conduct
public policy. Again, it happens at the end of the parliamentary mandate (in Sofia, the correlation parliamentary-local
support is always valid, as in most capitals).

I want to make myself clear: Despite not holding a high opinion of the GERB
party, I tend to notice public policy activity at the end of their mandate. For
better or worse.

Wednesday, 3 October 2012

In a recent short overview for the Institute for Regional and International Studies (IRIS), I am looking at the strategic implications and perspectives of the energy situation in the Western Balkans. The paper is available here.

About

I am based in Sofia, Bulgaria, formerly a journo and a researcher in the non-profit sector, now a civil servant fighting trafficking in human beings. I blog in English, Bulgarian and occasionally in some of the ex-Yugoslav languages about wine, travel and politics in the Balkans, the EU and its eastern neighbourhood. The name of the blog, излаз (izlaz), means 'egress,' 'outlet' in Bulgarian and 'exit' in Bosnian/Serbian/Croatian.